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RIBA opens pension plan for architects

The RIBA has launched a pension plan for architects in response to concerns small practices may struggle to satisfy new compulsory auto-enrolment legislation

Introduced in 2012, the legislation makes the provision of a pension to employees a legal requirement. Rolled out over the next five years it affects all businesses with two or more employees.

All pension providers charge a management fee as a percentage of an individual’s accumulated pension pot. Under the new plans RIBA is offering a rate of 0.44 per cent to all its members.

RIBA chief financial officer Andy Munro told the AJ: ‘A lot of commentators have warned that there will be issues with auto enrolment for small employers. It is a big concern that in two years when auto enrolment will be required by smaller practices that the big providers will say, “no, sorry you are too small for us”.

‘But we have worked with Aegon, the second largest pension provider, to create an “aggregate capability” that means we can offer an annual management rate of 0.44 per cent; a rate that is as good as we can see anywhere in the market.’

Munro denied the pension was a money making exercise. ‘We have to cover our costs but there is no intention to use this to make money out of members.

‘In a couple of years small practices will be required to auto enrol and they will find it impossible. We have stepped in to provide this service,’ he said.

Munro said the deal had been made possible by the development of specialist software that will allow firms to sign up via the RIBA website: ‘The software allows integration of the payroll data so we can offer the same level of service to a firm of 3 or 4 employees as we can a very large firm,’ he said.

As well as the 0.44 per cent fee Munro said RIBA would also probably charge around £10 per employee for the software: ‘The cost hasn’t been nailed down yet, we were thinking of around £5 - £10 per employee, but we may do it at a practice level.’

Munro also said that a number of other institutions had been ‘knocking at our door’ and he pledged to make the software a ‘white label’ product meaning it would be available to all. ‘We in the construction industry are all in this together,’ he said.

A number of large firms including British Airways and BT have already begun ‘staging’ and Munro said RIBA has lined up a number of seminars with the UK’s biggest architectural practices to discuss the offering.

‘Over the next twelve months around 100 chartered practices with 50 or more employees are expected to auto enrol and from June 2015 onwards over 2,000 architectural practices will be staging,’ said Munro.

Small practitioners were divided over the new service. Alan Wilkinson of Suffolk-based WPP Architects said: ‘If this scheme will genuinely help to take the administrative burden off small practices, then I would be in favour of it.’

He continued: ‘Frankly we are so overwhelmed by employment legislation and increasing demands on our time and our pockets that, done right, this could be quite useful.’

London-based architect Mark Power suggested the pension service could be first step towards creating an architects’ bank.

He said: ‘Perhaps the bank may even consider putting up funds for architect-led developments, in recognition of the added value that architectural design brings to properties and cities?’

He said: ‘The RIBA should focus on their true remit which is promoting the value of design to non-Architects.’

Colin Munsie of Urban Design Group added: ‘The [pension plan] idea is definitely a bad one, instead, [the institute] should be campaigning for fair ISA rates and [lobbying] the government so to have any increased regulatory imposition on small practices eliminated.’

Readers' comments
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For once the Institute is being really pro-active in setting out to assist small practitioners, and this should be applauded. Our lives are beset with increasing legislative burdens, and this will offer a simple and low cost solution. I say well done and thanks. However I would not like to learn subsequently that it is a profitable business exercise for the RIBA.Of course this must not divert effort from key lobbying, but if our businesses are helped so that we can concentrate on our architecture it does us all good.

At long last the RIBA is proposing something of genuine value to its members. The suggestion of an architects' bank (as they have in Spain) has to be the next obvious step since so many small practices have and will continue to have - difficulty in obtaining finance at affordable rates and terms from the existing banking system. Peter Morris seems to miss the obvious point when criticising this initiative that in trying to improve the financial security of its members, the RIBA is also helping to create the circumstances in which it is actually possible to conceive and deliver better buildings. I note Peter doesn't offer a plan for how the latter might otherwise be achieved - just a whinge about his interpretation of the RIBA's remit which, in its offering of a genuine benefit to the bulk of its members, he strangely finds reason to disagree with. Over the years I've not found myself to be a great fan of the Institute and the inconsequential witterings of its endlessly self-reconstituting Councils but this is undoubtedly the kind of proposition that gives practising registered architects a sound reason to be(come) a member. For once, therefore, well done to Andy Munro for being on the ball and looking creatively outside of the Portland Place box to find a genuinely valuable way of supporting the vast majority of RIBA members.

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The Architects' Journal is the voice of architecture in Britain. We sit at the heart of the debate about British architecture and British cities, and form opinions across the whole construction industry on design-related matters